HSBC China PMI Comes In At 48

REUTERS/Bobby Yip HSBC China manufacturing PMI came in at 48 in March, from 48.5 the previous month. This is below expectations for manufacturing to hold steady at 48.1. This was also the lowest reading since July 2013.

A reading below 50 indicates contraction. Those surveyed said "deteriorating market conditions weighed on client demand," according to the report.

"The final reading of the HSBC China Manufacturing PMI in March confirmed the weakness of domestic demand conditions," HSBC economist Hongbin Qu said in a press release.

"This implies that 1Q GDP growth is likely to have fallen below the annual growth target of 7.5%. We expect Beijing to fine-tune policy sooner rather than later to stabilise growth."

The report showed that even as domestic demand remained soft, new export orders climbed for the first time in four months.

Staffing levels also fell for the fifth consecutive month, though "job shedding eased to a marginal pace."

Qu has previously said that he expects that policymakers would announce measures to stabilize growth.

Here's a look at the trajectory of HSBC China PMI:

HSBC/Markit Economics

Earlier, we saw official PMI rise to 50.3, beating expectations. Bloomberg economist Tom Orlik tweeted this chart which shows that HSBC and official PMI readings have been diverging: